Tag Archives: bailout

This article, written by an economist in 2005, anticipated the sorry state of the Greek economy in 2011. I can’t help wondering what role the cost of hosting the 2004 Olympics played in their economic disaster. The full article is available by clicking the title below. ~LTG

When Athens won the right to host the 2004 Games in 1997, its budget was $1.6 billion. The final public cost is estimated to be around $9 billion — over five times the original budget. Meanwhile, most of Athens’ Olympics facilities today are reportedly underutilized.

The Games are touted to bring in tens of thousands of tourists, and, if things go according to the hype, to keep them coming into the indefinite future. Here, too, the evidence isn’t rosy.

Olympic participants and visitors often chase others away. In late 2004, Athens tourism officials were talking about a 10 percent drop in tourist visitors to Greece in 2004.

“It was a hugely wasted opportunity and one that sticks in the throat of many people. We are left with installations that are rotting away because we don’t even have the money to maintain them. A lot of entrepreneurs and property developers got rich very quickly,” said Ms Sakorafa.

Now an independent MP, the 54 year-old who once held the javelin world record is leading calls for a national debt audit. “How can we begin to think about measures to repay our debt when we don’t know where the overspend came from and who is accountable for it?” she asked.

Back in the Olympic Village residents are asking the same thing.

“Someone has to pay for the mistakes, but why should it be us?” Said Mrs Deligianni. “I thought we were buying into paradise but instead we are trapped in hell.

There are a lot of blog articles about the GAO audit of the Federal Reserve documenting what Bernanke and the big boys in the back rooms have been up to. I didn’t want to post anything here without some official documentation. This is from Vermont Senator Sanders’ website. WE ARE SO SCREWED! ~LTG

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. “As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sanders. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”

Among the investigation’s key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. “No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president,” Sanders said. Full Story Here

While all eyes are on the Treasury and its challenge to handle the federal government’s debt, we cannot afford to lose sight of equally disastrous bankruptcies looming on the state level.

Here are three reasons why you should care about state budgets:

1) Many states are already worse off than the federal government, delaying payments, jacking up taxes, etc. News outlets leaked in January that Congress is quietly coming to terms with state bankruptcies. Pundits might say otherwise, and they will drag it out into a slow-motion ending, but at this point it is really “when” instead of “if.”

2) Even without a federal default, state defaults will spell disaster on the economy. Health care, construction, education and farming are all married to state governments to some extent.

3) Part of the federal government’s deficit spending has been pumping money into states. Wonder why the economic stimulus bill in 2009 did not actually create those shovel-ready jobs? Because a lot of that money was given to states specifically to catch up Medicaid bills.

Those stimulus funds run out in July, and states are preparing to simply force providers to do without the money. State programs are already notorious for paying doctors, pharmacies and nursing homes at rates that are nothing but a smidge over cost.

In Massachusetts, for example, more than half of primary physiciansrefuse to add new patients who rely on state funding. Many have stopped seeing state-dependent patients altogether.

Across the country in Washington, pharmacy chain Walgreens accused the state of paying less than cost for prescriptions – meaning pharmacists actually lose money on every transaction. Walgreens was forced to start refusing new orders from Medicaid patients.

And that was in the good old days when stimulus money was there to help.

States like Illinois and California stall for several months before making payments. While on the waiting list, doctors are presumably expected to pay their bills with pixie dust. Shockingly, doctors don’t seem to enjoy this, and with each passing month more and more of them start turning away future patients.

South Carolina’s solution was toauthorize deficit spending for its Medicaid program. No word on where the state will find a handy $100 million laying around to take care of that.

In New Jersey, Republican Governor Chris Christie is looking to save some $300 million by using “managed care” tricks on Medicaid patients.

Managed care is a fancy term for rationing. It means state auditors will impose stricter standards for what counts as “necessary” treatment, encourage doctors to prescribe “cheaper” drugs, shorten the number of days you can stay in a hospital, and slap more copays on top.

Folks, we are watching the slow-motion decline of our government on all levels. Desperate state governments cannot afford to keep doctors and pharmacies in business. And this is but one place where states are failing. We haven’t even started talking about pensions, public schools, highway maintenance, or cities that can’t afford their police departments.

If you have not begun making contingency plans for your family’s future, I recommend now as a good time to start.

2. The International Monetary Fund (IMF) ranks No. 3, with 3,005.30 gold tonnes. A major source of funding for the IMF are “quotas” that are measured in SDR (Special Drawing Rights) units – a special type of IMF currency, the value of which is based on a basket of international currencies. Quotas serve as the IMF’s permanent and primary pool of resources that are tapped to provide loans. Quotas determine a respective member country’s access (borrowing limits) and its voting power. [Source: Michael Sarabia, “UICIFD Briefing No. 5: Funding the IMF,” by Michael Sarabia, prepared for the University of Iowa Center for International Finance and Development, November 2007.]

The United States has, traditionally and currently, paid the largest quota and, as a result, has the most voting power of any individual country. As of March 23, 2011, according to the IMF website, the United States still pays the largest quota of 37,149.3 SDRs — 16.58% of IMF’s total quotas.

Since the United States is the largest funder of the IMF, how much of the IMF’s gold reserves is from American taxpayers’ contributions?

Employees at General Motors are set to receive a profit-sharing bonus worth $4300 thanks to the company earning more than $4 billion in profit for 2010.

That sure is good news for those struggling workers. How will that money be put to use? Paying for their kids to do more fun stuff, of course:

“My money’s going to pay off credit cars and pay for school sports,” Pozniak said. Her three children are in Parma schools, and the district started pay-for-play policies last year to help balance its budget

Meanwhile, the federal government still owns 33% of shares in GM’s stock, and now word from the Obama administration says Uncle Sam will dump the worthless stock and take a loss of some $9 billion. And that doesn’t even touch the billions worth of debt that creditors had to kiss goodbye in bankruptcy court.

I’m waiting for the part where ACORN sends angry protestors to Pozniak’s home. Or is protection one of the perks of working for an auto maker?

The timing of all this sure is hinky. Why, it almost looks like Obama saved GM as a favor to the UAW and couldn’t care less how much it cost the rest of us.

The Federal Reserve System (FDS) was conceived in secrecy in 1910 on Jekyll Island, New York, then created in 1913 via the Federal Reserve Act. It is a strange public-private bastard-hybrid of privately-owned banks that act as America’s central bank with limited government supervision. As America’s central bank, the FDS supervises and regulates the banking system, manages the country’s money supply through monetary policy, maintains the stability of the financial system, and attempts to prevent and contain banking panics.

The importance of the Federal Reserve and its public-private nature have provoked many a conspiracy theory, which is not helped by its Inspector General Elizabeth Coleman’s admission in May 2009, that the FDS could not account for $9 TRILLION in “off-balance sheet transactions,” whatever that means.

Coleman’s admission provoked outrage among the American people, who demanded Congress to audit the Federal Reserve. The Fed, in turn, resisted every effort. Its chairman, Ben Bernanke, at one time even used fear tactics, darkly warning that an audit by the General Accounting Office “would be highly destructive to the stability of the financial system, the dollar and our national economic situation.”

Now comes even more disturbing revelations.

A limited one-time peak into the Federal Reserve revealed a secret taxpayer-funded bailout of FOREIGN banks in the amount of a mind-boggling $12.3 TRILLION — and Congress wasn’t even informed, not to speak of being consulted.

Like you, I still have a measure of trust in the basic goodness of my fellow human beings and in government, but the stark horrible reality of the Federal Reserve and the corrupt banking system is now too insistent to be ignored. I saw news of this some days ago but was too depressed by it to post. Below are excerpts from the most recent account, David DeGraw’s “The Wall Street Pentagon Papers.”

What if the greatest scam ever perpetrated was blatantly exposed, and the US media didn’t cover it? Does that mean the scam could keep going? That’s what we are about to find out…from the one-time peek we got into the inner-workings of the Federal Reserve. This is the Wall Street equivalent of the Pentagon Papers.

I’ve written many reports detailing the crimes of Wall Street during this crisis. The level of fraud, from top to bottom, has been staggering…. Just when I thought the banksters couldn’t possibly shock me anymore… they did.

We were finally granted the honor and privilege of finding out the specifics, a limited one-time Federal Reserve view, of a secret taxpayer funded “backdoor bailout” by a small group of unelected bankers. This data release reveals “emergency lending programs” that doled out $12.3 TRILLION in taxpayer money – $3.3 trillion in liquidity, $9 trillion in “other financial arrangements”… and Congress didn’t know any of the details….

Yes. The Founding Fathers are rolling over in their graves…. The Federal Reserve was secretly throwing around our money in unprecedented fashion, and it wasn’t just to the usual suspects like Goldman Sachs, JP Morgan, Citigroup, Bank of America, etc.; it was to the entire Global Banking Cartel. To central banks throughout the world: Australia, Denmark, Japan, Mexico, Norway, South Korea, Sweden, Switzerland, England… To the Fed’s foreign primary dealers like Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (U.K.), Barclays (U.K.), BNP Paribas (France)… All their Ponzi players were “gifted.” All the Racketeer Influenced and Corrupt Organizations got their cut.

…If you still had any question as to whether or not the United States is now the world’s preeminent banana republic, the final verdict was just delivered and the decision was unanimous. The ayes have it.

Any fairytale notions that we are living in a nation built on the rule of law and of the global economy being based on free market principles has now been exposed as just that, a fairytale. This moment is equivalent to everyone in Vatican City being told, by the Pope, that God is dead.

I’ve been arguing for years that the market is rigged and that the major Wall Street firms are elaborate Ponzi schemes, as have many other people who built their beliefs on rational thought, reasoned logic and evidence. We already came to this conclusion by doing the research and connecting the dots. But now, even our strongest skeptics and the most ardent Wall Street supporters have it all laid out in front of them, on FEDERAL RESERVE SPREADSHEETS.

Even the Financial Times, which named Lloyd Blankfein its 2009 person of the year, reacted by reporting this: “The initial reactions were shock at the breadth of lending, particularly to foreign firms. But the details paint a bleaker and even more disturbing picture.”

Yes, the emperor doesn’t have any clothes. God is, indeed, dead. But, for the moment at least, the illusion continues to hold power. How is this possible?

To start with, as always, the US television “news” media (propaganda) networks just glossed over the whole thing – nothing to see here, just move along, back after a message from our sponsors… Other than that obvious reason, I’ve come to the realization that the Federal Reserve’s crimes are so big, so huge in scale, it is very hard for people to even wrap their head around it and comprehend what has happened here.

Think about it. In just this one peek we got at its operations, we learned that the Fed doled out $12.3 trillion in near-zero interest loans, without Congressional input.

The audacity and absurdity of it all is mind boggling…

Based on many conversations I’ve had with people, it seems that the average person doesn’t comprehend how much a trillion dollars is, let alone 12.3 trillion. You might as well just say 12.3 gazillion, because people don’t grasp a number that large, nor do they understand what would be possible if that money was used in other ways.

Can you imagine what we could do to restructure society with $12.3 trillion? Think about that…

People also can’t grasp the colossal crime committed because they keep hearing the word “loans.” People think of the loans they get. You borrow money, you pay it back with interest, no big deal.

That’s not what happened here. The Fed doled out $12.3 trillion in near-zero interest loans, using the American people as collateral, demanding nothing in return, other than a bunch of toxic assets in some cases. They only gave this money to a select group of insiders, at a time when very few had any money because all these same insiders and speculators crashed the system.

Do you get that? The very people most responsible for crashing the system, were then rewarded with trillions of our dollars. This gave that select group of insiders unlimited power to seize control of assets and have unprecedented leverage over almost everything within their economies – crony capitalism on steroids.

This was a hostile world takeover orchestrated through economic attacks by a very small group of unelected global bankers. They paralyzed the system, then were given the power to recreate it according to their own desires. No free market, no democracy of any kind. All done in secrecy. In the process, they gave themselves all-time record-breaking bonuses and impoverished tens of millions of people – they have put into motion a system that will inevitably collapse again and utterly destroy the very existence of what is left of an economic middle class. That is not hyperbole. That is what happened.

We are talking about trillions of dollars secretly pumped into global banks, handpicked by a small select group of bankers themselves. All for the benefit of those bankers, and at the expense of everyone else. People can’t even comprehend what that means and the severe consequences that it entails, which we have only just begun to experience…. No matter which way you look at it, we are all in serious trouble!

If you are an elected official…and you believe in the oath you took upon taking office, you must immediately demand a full audit of the Federal Reserve and have Ben Bernanke and the entire Federal Reserve Board detained. If you are not going to do that, you deserve to have the words “Irrelevant Puppet” tattooed across your forehead….

Here’s a roundup of reports on this BernankeLeaks:

…Senator Bernie Sanders (I-Vermont)…was the senator who [sic] Bernanke blew off when he was asked for information on this heist during a congressional hearing. Sanders fought to get the amendment written into the financial “reform” bill that gave us this one-time peek into the Fed’s secret operations…. In an article entitled, “A Real Jaw-Dropper at the Federal Reserve,” Senator Sanders reveals some of the details:

At a Senate Budget Committee hearing in 2009, I asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later… we have begun to lift the veil of secrecy at the Fed…

After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed’s multi-trillion-dollar bailout of Wall Street and corporate America….

We have learned that the $700 billion Wall Street bailout… turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country.…

Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks — Deutsche Bank and Credit Suisse — which were the largest beneficiaries of the Fed’s purchase of mortgage-backed securities….

Has the Federal Reserve of the United States become the central bank of the world?… [read Global Banking Cartel]

…What we are seeing is the incredible power of a small number of people who have incredible conflicts of interest getting incredible help from the taxpayers of this country while ignoring the needs of the people. [read more]

In an article entitled, “The Fed Lied About Wall Street,” Zach Carter sums it up this way:

The Federal Reserve audit is full of frightening revelations about U.S. economic policy and those who implement it… major bank executives who had run their companies into the ground were allowed to keep their jobs, and shareholders who had placed bad bets on their firms were allowed to collect government largesse, as bloated bonuses began paying out soon after.

But the banks themselves still faced a capital shortage, and were only kept above those critical capital thresholds because federal regulators were willing to look the other way, letting banks account for obvious losses as if they were profitable assets.

So based on the Fed audit data, it’s hard to conclude that Fed Chairman Ben Bernanke was telling the truth when he told Congress on March 3, 2009, that there were no zombie banks in the United States. “I don’t think that any major U.S. bank is currently a zombie institution,” Bernanke said. As Bernanke spoke those words banks had been pledging junk bonds as collateral under Fed facilities for several months…

This is the heart of today’s foreclosure fraud crisis. Banks are foreclosing on untold numbers of families who have never missed a payment, because rushing to foreclosure generates lucrative fees for the banks, whatever the costs to families and investors…. Not only are zombie banks failing to support the economy, they are actively sabotaging it with fraud in order to make up for their capital shortages. Meanwhile, regulators are aggressively looking the other way.” [read more]

Even the Financial Times is jumping ship:

Sunlight Shows Cracks in Fed’s Rescue Story

It took two years, a hard-fought lawsuit, and an act of Congress, but finally… the Federal Reserve disclosed the details of its financial crisis lending programs. The initial reactions were shock at the breadth of lending, particularly to foreign firms. But the details paint a bleaker, earlier, and even more disturbing picture…. An even more troubling conclusion from the data is that…it is now apparent that the Fed took on far more risk, on less favorable terms, than most people have realized. [read more]

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Edward G. Griffin wrote a book on the founding of the Federal Reserve System, The Creature From Jekyll Island, that is now the definitive work on the Fed.